Recently, we wrote about the challenges of selling tablet PCs through wireless carriers. The broader CE retail industry may also be struggling to market these devices as well. Last week’s Best Buy circular exemplified one of the key challenges for tablet PC makers and their retail partners: educating and marketing this new product segment to mainstream consumers. Overcoming this obstacle is important for helping this promising high-growth category reach its full potential.
The circular included two highly touted devices: RIM’s PlayBook and Motorola’s Xoom. What was noteworthy was the placement of the devices. The Wi-Fi enabled PlayBook was included with the smartphones (page 11), even though it doesn’t have 3G connectivity nor does it tether to a BlackBerry phone as many expected. Meanwhile the Wi-Fi version of the Xoom (the 3G enabled version wasn’t included in the circular) was included with the PC accessories (page 18).
This simple example illustrates what we have been hearing from brands and retailers; they’re having trouble categorizing tablets and properly marketing the devices to consumers. This isn’t the first time technology companies have had issues with selling new devices to consumers, but the longer it takes for brands and retailers to figure it out, the longer it will take for a viable competitor to challenge Apple’s dominance in this category.
This also highlights Apple’s distinct advantage when it comes to distributing a product and is likely to continue to be the case going forward. Apple’s retail environment is able to not only better explain its tablet, the iPad, to consumers through dedicated sales people but Apple also captures more margin than competitors who have to share margin with retail partners. This makes it tougher for rivals to compete on price and awareness with Apple, which is especially important as we move further and further into a new era of computing where the traditional lines of definition and differentiation are blurring.
The confusion regarding how to classify tablets isn’t just limited to distribution. Internal groups within brands are in conflict as to which product group owns the devices. In the case of Samsung, the mobile PC groups have been fighting over who gets to claim ownership of the tablet space.
At the moment, go-to-market appears to be an inhibitor to growth for tablets as brands and retail partners figure out how best to sell this new class of device to the mainstream market. However, go-to-market needs to be a catalyst for tablets to reach the shipment potential of the category. What’s evident is that retailers aren’t even sure how to classify tablets in their weekend circulars, so Apple will continue to dominate the market, and rivals will have a hard time marketing their devices to consumers in the most effective way possible.